Posted on 16 July 2013
The French Government has reduced the number of years second homeowners must have their property before it is exempt from capital gains tax (CGT) from 30 to 22.
The previous 15-yer exemption was controversially doubled to 30 years earlier this year, but the French government now has reduced it after intense lobbying from the property industry.
The new rules mean that from 1st September 2013, anyone who has owned a second home in the French Alps, or anywhere in France, for more than 22 years will have complete exemption from CGT.
Some operators in the French property industry claimed that the 30-year rule had dissuaded a number of clients from selling their second homes, and that it was also unpopular with resident expats as it applies to properties they own back in the UK.
Lindsay Kinnealy, head of international property at UK based Pannone Solicitors, said many Britons with homes in France will welcome the initiative. “The move represents a tremendous potential benefit to individuals who might have owned second homes in France for some years but been looking to sell, either because they had become too old to visit regularly or because their children were not interested in taking them on,” she explained. “Even though they will still only be eligible after 22 years, that represents a significantly shorter period of time than before, and makes the value of hanging onto their French property far greater.”
There is also a proposal being considered in France for a one-off 20 per cent CGT discount for sales of second homes completed in 2014, regardless of how long they have been owned, in a bid to get the sluggish French property market moving.